1 in 3 Owner Managed Businesses Planning for Redundancies
As many as one in three owner managed businesses (OMBs) are planning to make redundancies in the coming months as they respond to the financial pressures they’re currently facing.
For over a year after the pandemic first hit, British businesses were able to partially pay their staff through the government’s furlough scheme but that initiative was ended at the beginning of October.
It had been anticipated that the ending of the furlough scheme might result in a major wave of redundancies across the UK but that situation has yet to happen.
However, there is mounting evidence that smaller businesses in particular will soon need to trim their workforce if they are to survive and thrive heading into 2022 and beyond.
Indeed, polling carried out for the accountancy network Moore UK suggests that there could soon be a significant increase in the number of people being made redundant by smaller firms.
Bosses at almost 450 OMBs were asked about their current expectations and 33 per cent said they plan to make redundancies now the furlough scheme is no longer in place to support them.
Of those planning to make redundancies, the average expectation was that they would need to scale back their workforce by around 45 per cent over the course of the next six months.
OMBs in London were found to be more likely than their counterparts in other regions of the country to have redundancies on their agenda, according to the latest figures.
In London, as elsewhere, it’s understood that hospitality businesses, including restaurants, hotels and pubs, will be among the OMBs feeling the most financial pressure in the coming weeks and months.
“No smaller business wants to lay off staff if it can be avoided and it seems like many are still waiting to see if they need to press that button,” explained Maureen Penfold from Moore UK.
“Their cash flow might allow them to keep their full workforces employed for now but they have plans in place to quickly make redundancies if they need to.”
Several business lobbying organisations have been calling on the government to introduce new measures of financial support for small firms across the country after the introduction of Plan B, which involves various restrictions bring brought back in to help limit the spread of the new Omicron Covid-19 variant.
“Policymakers should be careful not to assume that the economy is back in rude health,” remarked Ms Penfold from Moore UK. “The UK is far from out of the woods when it comes to redundancies.”
